Kenya’s largest Telcom company, Safaricom, has formally sent an inquiry for bagging an additional licence for the provision of mobile money services in Ethiopia.
The CEO of Safaricom, Peter Ndegwa, briefed investors about the action of the company, i.e. wrote to Ethiopia’s telecommunications regulator seeking clarification on conditions as well as the additional fees required to obtain the additional licence.
“The letter has gone in. We are currently awaiting a response from the Ethiopian authorities,” said Peter Ndegwa.
“Our understanding is we will be allowed to operate mobile money, but there are certain conditions that the government will be confirming to us including potentially some additional fee.”
The largest Kenya Telcom (Safaricom) won the bid to enter the Ethiopian market under the Global Partnership for Ethiopia in May. This was won by competing with the likes of MTN Group Limited, which is headquartered in Johannesburg, South Africa.
The Global Partnership for Ethiopia includes five different countries of which are Safaricom, Vodacom Group Ltd (South Africa), Vodafone Group PLC (UK), CDC Group PLC (UK), and Sumitomo Corporation (Japan).
Ethiotel is the only Telcom company in Ethiopia, and it launches its own mobile money in May 2021. After Ethiotel launches its own, the country prime minister said, the service would be open to other Telcom companies this year. And before the year runoff, Safaricom, a Kenya company has also shown their interest to launch their own mobile money service.
Ethiopia is the second-largest country in Africa with over 112 million population, and also the last to enable competition in the Telecom sector. This competitive advantage in the Telecom sector could be traced back to the 2019 Economic Reform Agenda (ERA), with the aid of the International Finance Corporation (IFC).
The agenda will enable the private sector to take larger participation in growth amid public sector financing capacity.